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Docket Nos. 88407, 88410 cons.-Agenda 17-May 2001.

TRAVELER'S INSURANCE COMPANY et al. (Gibralter 
Casualty Company, Appellee and Cross-Appellant) v. ELJER 
MANUFACTURING, INC., et al., Appellant and Cross-Appellee.

Opinion filed September 20, 2001.

JUSTICE McMORROW delivered the opinion of the court:

We are asked in this consolidated appeal to determine whenindemnity coverage for "property damage" under excesscomprehensive general liability insurance policies, issued between1979 and 1990 by various insurance companies⁽¹⁾ (the insurers) toEljer Manufacturing, Inc., Eljer Industries, Inc., United StatesBrass Corporation and Household International, Inc. (thepolicyholders), is triggered. The insurers filed four declaratoryjudgment actions in the circuit court of Cook County, seeking adeclaration with respect to the insurers' obligations to indemnifythe policyholders in thousands of underlying product liabilityclaims filed by individuals alleging property damage arising out ofthe failure of the "Qest Qick/Sert II" (Qest) residential plumbingsystem. The Qest system was manufactured and sold by thepolicyholders, and was installed in buildings throughout thecountry during the policy periods. The circuit court of CookCounty consolidated the insurers' declaratory judgment actions,and the parties thereafter filed cross-motions for partial summaryjudgment on the trigger-of-coverage issue. The circuit courtgranted summary judgment in favor of the insurers, and denied thecross-motion for summary judgment brought by the policyholders.The circuit court ruled, as a matter of law, that the insurers' dutyto indemnify the policyholders for underlying "property damage"claims is triggered only when an actual leak in a Qest plumbingsystem occurs during the policy period. The circuit court explicitlyrejected the argument advanced by the policyholders that "propertydamage" covered under the insurers' policies occurred during thepolicy period in which the Qest plumbing system was installedinto a residence.

The appellate court reversed the circuit court's grant ofsummary judgment as to those insurance policies governed byNew York law and issued prior to 1982, holding that the policylanguage did not require a leak to trigger coverage. With respectto those policies governed by Illinois law and issued after 1981,the appellate court determined that the circuit court correctlydenied the policyholders' motion for summary judgment.However, the appellate court also found that the circuit court erredin granting summary judgment to the insurers with respect to thepost-1981 policies. The appellate court concluded that the circuitcourt incorrectly held that "property damage" occurs, and coverageis therefore triggered, only at the time that a Qest system developsa leak. 307 Ill. App. 3d 872. We granted the policyholders'petitions for leave to appeal (177 Ill. 2d R. 315(a)), andconsolidated these cases. For the reasons that follow, we affirm inpart, reverse in part, and remand this cause to the circuit court forfurther proceedings.

BACKGROUND

Certain relevant facts giving rise to these consolidated actionsare not in dispute. Between 1979 and 1990, United States BrassCorporation (U.S. Brass) manufactured and sold the componentscomprising a polybutylene plumbing system known as "QestQick/Sert II" (Qest). This plastic, hot/cold pressure residentialplumbing system was sold to plumbing contractors who installedthe system at construction sites, usually behind walls, or betweenfloors and ceilings. Qest systems were installed in site-builthomes, apartment buildings, and condominiums across the countryuntil December 31, 1986. At that time, U.S. Brass ceasedwarranting the Qest system for use in site-built structures.However, U.S. Brass continued to manufacture and market theQest system for mobile homes and prefabricated housing through1990. It is estimated that between 500,000 and 750,000 housingunits in the United States contain the Qest plumbing system. U.S.Brass is currently a wholly owned subsidiary of EljerManufacturing, Inc., which, in turn, is wholly owned by EljerIndustries, Inc. For a period of time relevant to this matter, U.S.Brass was a wholly owned subsidiary of Household International,Inc. As stated, these four corporate entities are the policyholdersin the matter at bar.

According to an affidavit filed in the circuit court byCatherine E. Bracken, general counsel for U.S. Brass and seniorcounsel of Eljer Industries, Inc., as a result of certain allegeddefects in the Qest plumbing system, product liability claims withrespect to the Qest systems were first filed against U.S. Brass andits parent corporations in the early-1980s. These claims generallyalleged that defects in the Qest system caused the system to leak,and sought recovery based upon theories of negligence, breach ofwarranty, strict tort liability, and, in some cases, fraud ormisrepresentation. According to Bracken's affidavit, by the end of1993, approximately 61,300 claims had been filed against U.S.Brass and its parent companies as a result of Qest system failures.Based upon the number of claims at that time, U.S. Brassestimated that approximately 4.6% of the Qest systems installedbetween 1979 and 1990 had experienced failures. Bracken averredthat U.S. Brass and Eljer had made no subsequent estimates withrespect to the projected failure rate of the Qest systems.

In her affidavit, Bracken further stated that several juryverdicts, in various jurisdictions across the county, have beenentered against U.S. Brass and its parent corporations as a resultof the Qest claims, "and thousands of other claims have beensettled."⁽²⁾ Kurt Nelson, outside counsel for U.S. Brass, stated in anaffidavit submitted to the circuit court that almost all litigatedclaims involved residences which had experienced leaks in theQest system. Nelson averred that these claims generally soughtrecovery for water damage to the housing structure, fixtures andpersonal property. In addition, damages were sought for expensesincurred in removing the Qest system from behind walls, floorsand ceilings, and for diminution in the value of the buildingresulting from the presence of allegedly defective plumbing.According to Nelson, a minority of claims involved buildings thathad not yet experienced leaks, but in which the homeowners, as apreventive measure, had removed the Qest systems. These claimssought recovery for the cost of replacing the Qest system as wellas the diminution in value of the residences.

During the early 1990s, the four insurance coverage suits atissue in the appeal at bar were filed in the circuit court of CookCounty. In May 1994, while these declaratory judgment actionswere pending, U.S. Brass filed for bankruptcy protection in theUnited States Bankruptcy Court for the Eastern District of Texas.⁽³⁾Upon U.S. Brass' bankruptcy filing, proceedings in these CookCounty coverage actions were automatically stayed. In June 1994,U.S. Brass filed in the United States Bankruptcy Court for theNorthern District of Illinois a motion to transfer venue of thesefour coverage suits to the federal Bankruptcy Court for the EasternDistrict of Texas. However, the federal bankruptcy court for theNorthern District of Illinois abstained from exercising jurisdictionand ordered these matters remanded to the circuit court of CookCounty. The order of the bankruptcy court was affirmed by theUnited States District Court for the Northern District of Illinois(see U.S. Brass Corp. v. California Insurance Co., 198 B.R. 940(N.D. Ill. 1996)) and the United States Court of Appeals for theSeventh Circuit (see In re United States Brass Corp., 110 F.3d1261 (7th Cir. 1997)). On December 31, 1997, the bankruptcy staywas lifted by the United States Bankruptcy Court for the EasternDistrict of Texas. Thereafter, these declaratory judgment suitswent forward in the circuit court of Cook County.

The circuit court consolidated the four suits into a singleaction seeking a declaration with respect to the triggering event forthe insurers' duty to indemnify the policyholders for theunderlying Qest liability claims. Throughout the period duringwhich the policyholders manufactured and marketed the Qestsystem, the policyholders maintained multiple layers ofcomprehensive general liability (CGL) insurance. The excess CGLpolicies at issue in this appeal are "form following" policies whichincorporate the terms and conditions of the policy in the layer ofcoverage below them, and which are only to be implicated oncethe underlying layers of coverage are exhausted. The relevantlanguage contained in all of the excess CGL policies at issue in thematter at bar is identical, to the extent that all policies provideindemnity coverage for an "occurrence" resulting in third-party"property damage" which takes place during the respective policyperiod.

However, the policies differ with respect to the definition of"property damage," depending upon the years in which thepolicies were issued. The excess CGL indemnity policies in effectfrom 1979 through 1981 (pre-1982 policies) were negotiated andissued in New York to a New York predecessor corporation ofHousehold International, Inc., the former parent corporation ofU.S. Brass. These policies followed form to a first-layer umbrellapolicy issued by Highlands Insurance Company, and define"property damage" as an "injury to tangible property." The partiesagree that New York law controls the interpretation of the pre-1982 policies.

The parties further agree that Illinois law controls theinterpretation of the excess CGL indemnity policies issued after1981 through 1990 (post-1981 policies). These policies werenegotiated and issued in Illinois upon the move of U.S. Brass'parent corporation to this state, and followed form to a first-layerumbrella policy issued by Travelers Indemnity Company. Thepost-1981 policies define "property damage" as "physical injuryto or destruction of tangible property."⁽⁴⁾

The parties at bar dispute when the insurers' duty toindemnify the policyholders for underlying "property damage"claims is triggered. The insurers filed with the circuit court amotion for partial summary judgment on the trigger of coverageissue, arguing that under the language of the policies, indemnitycoverage for Qest claims is triggered no earlier than the time atwhich a Qest system first leaks, and not at the time that the systemwas installed. According to the insurers, it is only those policies ineffect at the time of the occurrence of a leak which give rise totheir indemnification obligation. The policyholders filed a cross-motion for summary judgment, seeking a declaration that the veryinstallation of the allegedly defective Qest system into a residentialstructure causes "property damage" within the meaning of thepolicies and, therefore, that indemnity coverage under the policiesis triggered at the time of installation. In the alternative, thepolicyholders requested that the circuit court allow discovery onthe issues raised by the parties' summary judgment motions.

On May 27, 1998, the circuit court issued a memorandum ofopinion in which the court found that, as a matter of law,indemnity coverage under the policies is triggered upon the leakof a Qest system, because it is only at that time that a third-partyexperiences "property damage" within the meaning of the policylanguage. The circuit court further found that, as a matter of law,the installation of a Qest system did not constitute "propertydamage" within the meaning of the policies.

In addressing the coverage trigger issue with respect to thepolicies issued prior to 1982, the circuit court reviewed the NewYork decisions submitted by the parties, and concluded that "thereasoning of the New York courts clearly illustrates that the plainlanguage of the policies calls for coverage upon the occurrence ofan injury-in- fact." Therefore, the circuit court held that, underNew York law, "the installation of the plumbing system is not thetriggering event. The 'occurrence' is the leak as that is when the'effects of exposure' actually result in damage to property."

With respect to the trigger of coverage under the post-1981policies, the circuit court relied upon our appellate court'sdecisions in Diamond State Insurance Co. v. Chester-Jensen Co.,243 Ill. App. 3d 471 (1993), and Bituminous Casualty Corp. v.Gust K. Newberg Construction Co., 218 Ill. App. 3d 956 (1991).Applying the reasoning of these decisions, the circuit court heldthat the policy coverage is triggered at the moment there is a leakin a Qest system, and not upon installation of the system. Inreaching this conclusion, the circuit court observed that CGLpolicies are "intended to protect the insured from liability forinjury or damage to the person or property of others; they are notintended to pay the costs associated with repairing or replacing theinsured's defective work and products, which are purely economiclosses." Quoting from the Diamond State decision, the circuitcourt concluded that "[f]inding coverage for the cost of replacingor repairing defective work would 'transform the policy intosomething akin to a performance bond.' "

On July 7, 1998, the circuit court entered an agreed ordergranting the insurers' motion for summary judgment on the triggerof coverage issue, denying the policyholders' cross-motion forsummary judgment on the trigger of coverage issue, and directingentry of a declaratory judgment that "it is the leak of the Qest/QickSert II polybutylene plumbing system, and not the installation ofthe system, which will trigger coverage for property damageclaims under the policies issued by the insurers in these cases."

On appeal, the appellate court affirmed in part and reversedin part the judgment of the circuit court. 307 Ill. App. 3d 872. Theappellate court held that the circuit court erred in grantingsummary judgment to the insurers with respect to the coveragetrigger issue under the pre-1982 policies. The appellate courtobserved that in Sturges Manufacturing Co. v. Utica MutualInsurance Co., 37 N.Y.2d 69, 332 N.E.2d 319, 371 N.Y.S.2d 444(1975), New York's highest court determined that the veryinstallation of a defective component, other than a contaminant,could constitute "property damage" under policy languageidentical to that at issue in the cause at bar. The appellate courtobserved that, under Sturges, coverage for "property damage"under the pre-1982 policies could be triggered at the time ofinstallation if it caused diminution in value to the residences inwhich the Qest system was installed in an amount in excess of thevalue of the Qest system itself. The appellate court further found,however, that since the record contained no evidence of whether,in fact, any diminution in value resulting from the presence of theQest system in a residence exceeded the value of the Qest systemitself, the circuit court correctly denied the policyholder's motionfor summary judgment, in which the policyholders had arguedthat, as a matter of law, diminution in value within the meaning ofthe Sturges decision occurred upon the very installation of theQest system. Finally, the appellate court held that, to the extentthat the policyholders were requesting a declaration of theinsurers' duty to indemnify, the relief they seek is "prematurepending resolution of the underlying claims." 307 Ill. App. 3d at887. Accordingly, the appellate court remanded this issue to thecircuit court for further proceedings.

With respect to the excess CGL policies issued to thepolicyholders after 1981, the appellate court, applying Illinois law,rejected the argument advanced by the policyholders thatindemnity coverage for "property damage" within the meaning ofthe policies was triggered upon the very installation of a Qestsystem into a structure. The appellate court therefore affirmed thecircuit court's denial of the policyholders' motion for summaryjudgment on this issue. The appellate court concluded, however,that although coverage under the post-1981 policies is nottriggered by the mere installation of a Qest system, it "can betriggered prior to the development of a leak if the replacement ofthe system necessitates actual physical damage to tangible propertyother than the Qest System itself." 307 Ill. App. 3d at 886. Thus,the appellate court determined that the circuit court erred inconcluding that coverage under the post-1981 policies is onlytriggered upon a Qest system developing a leak, and also erred ingranting summary judgment in favor of the insurers on this issue.Accordingly, the appellate court reversed the circuit court's grantof summary judgment to the insurers with respect to the post-1981policies, and remanded the cause to the circuit court for furtherproceedings.

We allowed the policyholders' petitions for leave to appeal(177 Ill. 2d R. 315(a)), and consolidated the actions. We alsoallowed an amicus curiae brief to be filed by the Insurer's Year2000 Roundtable in support of the insurers' position. In addition,the insurers were granted leave to file briefs as cross-appellants.On December 1, 2000, this court issued an opinion affirming inpart and reversing in part the judgment of the appellate court. U.S.Brass, Eljer Manufacturing, Inc., and Eljer Industries, Inc.,subsequently filed a petition for rehearing, which we allowed. 155Ill. 2d R. 367.

ANALYSIS

The sole issue presented in this appeal concerns theconstruction of the "property damage" provision contained withinthe excess CGL indemnity policies issued to the policyholders bythe insurers. In general, the insurers argue that "property damage"does not occur until a particular claimant's Qest system fails andleaks, causing water damage to the claimant's property. Accordingto the insurers, this is the earliest possible moment that the duty toindemnify the policyholders is triggered. Conversely, thepolicyholders advance the argument that "property damage" withinthe meaning of the policies takes place at the time of theinstallation of the allegedly defective Qest system. Therefore, thepolicyholders contend, the insurers' duty to indemnify thepolicyholders is triggered at the time of installation, under thepolicy in effect during that period, even if no leak takes place untilafter the policy period has concluded.

Initially, we note that this appeal was taken from the circuitcourt's orders granting summary judgment in favor of the insurerson the trigger of coverage issue and denying the policyholders'cross-motion for summary judgment. In appeals from summaryjudgment rulings, our review is de novo. Crum & ForsterManagers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 390(1993); Outboard Marine Corp. v. Liberty Mutual Insurance Co.,154 Ill. 2d 90, 102 (1992). Although the use of summary judgmentaids in the expeditious disposition of a lawsuit, "[s]ummaryjudgment is a drastic measure and should only be granted if themovant's right to judgment is clear and free from doubt."Outboard Marine, 154 Ill. 2d at 102. A motion for summaryjudgment is properly granted, therefore, only when the pleadings,depositions, admissions, and affidavits on file reveal that there isno genuine issue as to any material fact, and that the moving partyis entitled to judgment as a matter of law. 735 ILCS 5/-1005(c)(West 1998). In considering a summary judgment motion, thecourt has a duty to construe the evidence strictly against themovant and liberally in favor of the nonmoving party. OutboardMarine, 154 Ill. 2d at 131-32.

The construction of the provisions of an insurance policy isalso a question of law, subject to de novo review. American StatesInsurance Co. v. Koloms, 177 Ill. 2d 473, 479-80 (1997);Outboard Marine, 154 Ill. 2d at 108. In construing the language ofthe policy, the court's primary objective is to ascertain and giveeffect to the intent of the parties to the contract. Koloms, 177 Ill.2d at 479; Outboard Marine, 154 Ill. 2d at 108. In order toascertain the meaning of the policy's language and the parties'intent, the court must construe the policy as a whole and "take intoaccount the type of insurance purchased, the nature of the risksinvolved, and the overall purpose of the contract." Koloms, 177 Ill.2d at 479; see also Outboard Marine, 154 Ill. 2d at 108. If thewords of a policy are clear and unambiguous, "a court must affordthem their plain, ordinary, and popular meaning." (Emphasis inoriginal.) Outboard Marine, 154 Ill. 2d at 108. Conversely, if thelanguage of the policy is susceptible to more than one meaning, itis considered ambiguous and will be construed strictly against theinsurer who drafted the policy and in favor of the insured. Koloms,177 Ill. 2d at 479; Outboard Marine, 154 Ill. 2d at 108-09.However, this court "will not strain to find ambiguity in aninsurance policy where none exists." McKinney v. AllstateInsurance Co., 188 Ill. 2d 493, 497 (1999); see also Crum &Foster, 156 Ill. 2d at 391.

The issue of construction presented by this appeal arises in thecontext of the excess insurers' duty to indemnify thepolicyholders. "The duty to indemnify arises only when theinsured becomes legally obligated to pay damages in theunderlying action that gives rise to a claim under the policy."Zurich Insurance Co. v. Raymark Industries, Inc., 118 Ill. 2d 23,52 (1987); see also Outboard Marine, 154 Ill. 2d at 128. "[T]hequestion of whether the insurer has a duty to indemnify the insuredfor a particular liability is only ripe for consideration if the insuredhas already incurred liability in the underlying claim against it."Outboard Marine, 154 Ill. 2d at 127; see also United StatesFidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64,73 (1991); Zurich, 118 Ill. 2d at 52. Once the insured has incurredliability as a result of the underlying claim, an insurer's duty toindemnify arises only if "the insured's activity and the resultingloss or damage actually fall within the CGL policy's coverage."(Emphasis in original.) Outboard Marine, 154 Ill. 2d at 128.

In the case at bar, the record establishes that the policyholdershave already incurred liability with respect to the underlying Qestclaims. In order to assess if and when the insurers' duty toindemnify the policyholders is triggered, we must determinewhether the policyholders' activities, with respect to coverage for"property damage," actually fall within the policies' coverageduring the policy periods. The parties agree that there must be an"occurrence" resulting in "property damage" during the policyperiod before coverage under the policies is triggered. Theydisagree, however, as to when the covered "property damage"occurs. The correct application of the coverage trigger necessarilydepends upon the meaning of "property damage" as that phrase isused in the policies. Because the policies differ with respect to themeaning of "property damage" based upon when the policies wereissued, we divide our analysis into two parts: we first consider thepolicies issued for periods prior to 1982, and thereafter address thepolicies issued for periods subsequent to 1981.

I. Pre-1982 Policies

The excess CGL indemnity policies issued by the insurers tothe policyholders between 1979 and 1981 provide that the insurershave a duty to indemnify the policyholders for "damages becauseof *** property damage *** caused by each occurrence happeninganywhere in the world." All pre-1982 policies contain the identicaldefinitions for "occurrence" and "property damage." The policiesdefine "occurrence" as "an accident, including injurious exposureto conditions, which results, during the policy period in ***property damage." The policies define "property damage" as"injury to or destruction of tangible property."

As stated, there is no dispute between the parties that NewYork law controls the interpretation of the language containedwithin the pre-1982 policies, nor that New York applies an injury-in-fact trigger for policy coverage (see Maryland Casualty Co. v.W.R. Grace & Co., 23 F.3d 617, 625-26 (2d Cir. 1993)). Theparties disagree, however, as to when "property damage" takesplace within the meaning of the pre-1982 policies. The insurers, intheir cross-appeal, contend that the circuit court correctly foundthat "property damage" occurs only when a Qest system leaks, andthat the appellate court erred in concluding that under New Yorklaw, diminution in value caused to the residence by the presenceof a Qest system may constitute an "injury to tangible property,"and, therefore, "property damage." The policyholders respond thatthe appellate court properly reversed the circuit court and correctlyfound that under the law of New York, an "injury to tangibleproperty" may include tangible property which has beendiminished in value by the Qest system to an extent greater thanthe value of the Qest system. We agree with the policyholders.

In Sturges Manufacturing Co. v. Utica Mutual Insurance Co.,37 N.Y.2d 69, 72-73, 332 N.E.2d 319, 322, 371 N.Y.S.2d 444,447-48 (1975), New York's highest court interpreted the "propertydamage" clause of a CGL policy which contained languageidentical to that in the pre-1982 policies at bar. In that case,Sturges, a manufacturer of ski straps, brought a declaratoryjudgment action against its insurer, seeking a declaration of theinsurer's coverage obligations with respect to a breach of warrantyand negligence action filed against Sturges by one of itscustomers, Americana, which had incorporated the straps into itsown ski bindings. Americana sued Sturges when, due to allegedlydefective stitching on the part of Sturges, the ski straps brokeunder stress and caused Americana's customers to return andcancel their orders for ski bindings. Americana claimed in theunderlying suit that Sturges' straps, as a defective component ofthe bindings into which they were incorporated, diminished thevalue of, and caused harm to, the bindings as a whole. In holdingthat such claims could constitute an "injury to tangible property"within the meaning of the policy language, the Court of Appealsof New York stated that "[w]hen one product is integrated into alarger entity, and the component product proves defective, theharm is considered to be harm to the entity to the extent that themarket value of the entity is reduced in excess of the value of thedefective component [citation]." Sturges, 37 N.Y.2d at 72-73, 332N.E.2d at 322, 371 N.Y.S.2d at 447. The decision in Sturgesstands for the proposition that, under New York law, an "injury totangible property" includes tangible property which, as a result ofthe integration of a defective product, has been diminished invalue to an extent greater than the value of the defective product.

Based upon the holding of the Sturges court, we agree withthe appellate court below that the circuit court erred in holdingthat, under New York law, an "injury to tangible property" occursonly when a Qest system leaks. Under Sturges, the term "injury totangible property" also includes the diminution in a home's valueas a result of the presence of a Qest system, as long as thatdiminution is greater than the value of the Qest system itself.

Having determined what constitutes "property damage"within the meaning of the pre-1982 policies governed by NewYork law, we now turn to the question of when such damageoccurs for purposes of triggering the insurers' duty to indemnify.As stated, the duty to indemnify arises when the insured hasincurred liability in the underlying claims, and the insured'sactivity and resulting loss or damage actually falls within thecoverage of the CGL policy. Outboard Marine, 154 Ill. 2d at 127-28; Zurich, 118 Ill. 2d at 52. The record indicates that the vastmajority of Qest claims which have either been settled or haveended in judgment against the policyholders have resulted fromleaks in the Qest system. The record also reveals that these claimssought recovery for, inter alia, water damage to the residence, theresidence's fixtures, and personal property contained within theresidence. Accordingly, the policy coverage for the leak claims inwhich claimants recovered for water damage was triggered at thetime the water damage occurred. However, the record furtherreveals that claimants alleging leaks in their Qest system alsosought damages for the diminution in value of the residenceresulting from the presence of the allegedly defective Qest system.It is unclear from the record exactly what type of damages wereawarded to those claimants who prevailed on claims alleging Qestsystems leaks. We cannot discern from the record if any part of thedamages awarded to the leak claimants was for diminution in thevalue of their homes as a result of the Qest system and, if so, whenthis diminution occurred and whether the alleged diminution invalue was greater than the value of the Qest system itself. Inaddition, the record further indicates that a minority of claims filedagainst the policyholders sought recovery for the diminution invalue of the residential property due to the presence of the Qestsystem in the home prior to the system's leaking. However, therecord is again unclear with respect to whether any settlement orjudgment was entered against the policyholders in whichdiminution in value, within the meaning of Sturges, was actuallyawarded and, if so, when such diminution occurred.

Based upon the state of the record before us, we agree withthe appellate court below that the circuit court erred in grantingsummary judgment in favor of the insurers who issued policies forperiods prior to 1982. We also agree with the appellate court thatthe circuit court properly denied the policyholders' cross-motionfor summary judgment with respect to the pre-1982 policies. Asstated, summary judgment is proper only if the pleadings andevidence, when viewed liberally in favor of the nonmoving party,establish that there is no genuine issue of material fact and themoving party is entitled to judgment as a matter of law. E.g.,Outboard Marine, 154 Ill. 2d at 131-32.

The record before us establishes that there are disputed issuesof fact material to the resolution of this issue. To the extent theparties are seeking a declaration with respect to the insurers' dutyto indemnify, we remand this portion of the instant cause to thecircuit court with instructions to determine, as to each claim forwhich indemnity is sought from the pre-1982 insurers, if covered"property damage" occurred within the relevant policy periods,with reference to the specific type of damage sought to beindemnified. We note that, at this time, such determination canonly be made with respect to claims actually settled or which havecome to judgment and for which the policyholders have incurredliability. We agree with the appellate court that a declaration withrespect to the insurers' duty to indemnify is premature as to thosecases still pending against the insurers. Such cases will becomeripe at the time that the underlying claims are resolved.

II. Post-1981 Policies

We next address the excess CGL indemnity policies issued tothe policyholders by the insurers after 1981. The parties agree thatthese policies are governed by Illinois law. As stated, in construingthe language of an insurance policy, the court's primary objectiveis to ascertain and give effect to the intent of the parties to thecontract. Koloms, 177 Ill. 2d at 479; Outboard Marine, 154 Ill. 2dat 108. If the words of a policy are clear and unambiguous, "acourt must afford them their plain, ordinary, and popularmeaning." (Emphasis in original.) Outboard Marine, 154 Ill. 2d at108. The post-1981 excess CGL policies issued by the insurers tothe policyholders define "property damage" as "physical injury to*** tangible property which occurs during the policy period."(Emphasis added.) It is the addition of the word "physical" to thisdefinition which distinguishes the policies issued for periodssubsequent to 1981 from those policies issued for periods prior to1982.

The policyholders assert that both the circuit and appellatecourts erred in holding that, under Illinois law, the very installationof a Qest system within a residence did not constitute "physicalinjury to tangible property" and, therefore, did not constitute"property damage" within the meaning of the post-1981 policies.According to the policyholders, homes which contain the Qestsystem are "tangible property" that suffer "injury" as a result of theinstallation of a plumbing system which has a propensity to leak.The policyholders characterize the injury to the homes as"physical" because the defective Qest system was physicallyincorporated and connected to the residences and diminished thevalue of the residences from the moment the Qest system wasinstalled.

In support of the "installation trigger" of coverage, thepolicyholders rely in principal part upon the majority opinionrendered by the United States Court of Appeals for the SeventhCircuit in Eljer Manufacturing, Inc. v. Liberty Mutual InsuranceCo., 972 F.2d 805 (7th Cir. 1992), and contend that the appellatecourt below erred in declining to adopt the rationale of the Eljeropinion. The policyholders also maintain that "Illinois asbestosproperty damage insurance coverage cases also support theincorporation doctrine," and assert that the appellate court belowerred in concluding that such cases provided little or no guidancein resolving the issue at bar.

The insurers respond that the appellate court correctlyaffirmed the circuit court's denial of the policyholders' cross-motion for summary judgment on this issue. According to theinsurers, the circuit and appellate courts properly determined that,under the policies' plain language, the mere installation of afunctioning Qest system into a residence does not constitute a"physical injury to tangible property" and thus does not triggercoverage under the post-1981 policies. The insurers furthercontend that the appellate court correctly determined that "physicalinjury" also does not encompass the diminution in value to aresidence resulting from the failure of a Qest system to perform aspromised. Relying upon the decisions of our appellate court inDiamond State Insurance Co. v. Chester-Jensen Co., 243 Ill. App.3d 471 (1993), and Bituminous Casualty Corp. v. Gust K.Newberg Construction Co., 218 Ill. App. 3d 956 (1991), theinsurers assert that such an alleged diminution in value constitutesan intangible economic loss which is not covered under thepolicies' provisions. In addition, the insurers contend that theappellate court appropriately declined to follow the SeventhCircuit's majority opinion in Eljer, as Eljer ignored the plainmeaning of the phrase "physical injury" and instead adopted aconstruction which fails to give effect to both words at the sametime. Finally, the insurers maintain that the appellate courtcorrectly determined that the asbestos cases relied upon by thepolicyholders are inapposite, for the matter at bar, unlike anasbestos action, does not involve the installation of a"contaminant" into another structure.

Because the issue before us is one of contract interpretation,we begin with an examination of the language of the disputedpolicies. It is clear from the arguments of the parties that theirdispute focuses upon the meaning of the phrase "physical injury totangible property." The policyholders maintain that this term isambiguous and that a reasonable interpretation of the phrase is thatcoverage is triggered at the time a defective Qest system isincorporated into a home. The policyholders also contend that thiscourt's decision in American States Insurance Co. v. Koloms, 177Ill. 2d 473 (1997), "require[s]" us to examine the relevantinsurance industry drafting history of the post-1981 policies'definition of "property damage."

The arguments of the policyholders are misplaced. We do notfind ambiguity in the phrase "physical injury to tangible property."In order to trigger coverage for "property damage," the plainlanguage of the post-1981 policies requires that there be an injuryto tangible property and that the injury be physical in nature.Because the words of the policy are unambiguous, it isunnecessary for this court to consider extrinsic evidence of thepolicy's purported meaning. Rather, we must afford theunambiguous policy terms their plain, ordinary and popularmeaning. As this court has previously noted in Outboard Marine,the "usual and ordinary" meaning of a phrase is " 'that meaningwhich the particular language conveys to the popular mind, tomost people, to the average, ordinary, normal [person], to areasonable [person], to persons with usual and ordinaryunderstanding, to a business [person], or to a lay[person].' "Outboard Marine, 154 Ill. 2d at 116, quoting 2 Couch onInsurance 2d